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December 10, 2011

13Ds are filed with the Securities and Exchange Commission within 10 days of an entity's attaining a greater than 5% position in any class of a company's securities. Subsequent changes in holdings or intentions must be reported in amended filings. This material has been extracted from filings released by the SEC from Dec. 1 through Dec. 7, 2011. Source: InsiderScore.com

Hedge fund Pershing Square Capital, in an update on its discussions with management, disclosed that it owns 21,057,428 shares (12.4% of all voting shares).

In its filing, Pershing said that it is engaged in discussions with representatives of Canadian Pacific concerning, among other things, changes to the railroad's business and operations, its executive management and its board composition. Pershing believes that these talks have been productive, but said there is no assurance that Canadian Pacific will adopt any of the suggestions made by Pershing's representatives.

On Nov. 17, Pershing exercised options to buy 3,047,924 shares of Canadian Pacific at an average strike price of $30.54.

Q Investments, a private-equity firm controlled by the billionaire Texas banker Geoffrey Raynor said it plans to decrease its stake in the amusement-park company, in order to meet internal guidelines on position size. It also disclosed that it now owns 10,021,418 (18.1%).

In its filing, Q Investments said that, "assuming [the stock] stays near or above current levels," it intends to sell roughly 3 million shares "over the next year or so," reducing its holdings to approximately 7 million shares. Q said it believes its efforts to advocate for change have helped the stock price nearly double, but the position now constitutes a significant concentration of its equity capital. The firm said it expects to "continue to be optimistic about the possibility for further price appreciation over the next few years as the new management team executes its strategy and places a greater focus on distributions to unit holders."

In its filing, Gamco presented a proposal to Gaylord for inclusion in the proxy for the 2012 shareholders meeting; the proposal urges shareholders to request that the board not extend the Aug. 12, 2012, expiration date of a shareholder-rights agreement, commonly known as a poison-pill provision, that limits large shareholders or groups from owning 22% or more of Gaylord.

Gamco disclosed buying 38,965 shares from Nov. 17 through Nov. 30 at price s ranging from $19.12 to $21.88 a share. Gamco also disclosed selling 4,970 shares from Nov. 17 through Nov. 30 at $19.95 to $21.88 per share.

On Dec. 5, Moab Capital Partners sent a letter to Mac-Gray, a laundry-facilities management contractor, expressing its intention to nominate a slate of directors. The letter was sent, Moab said, after it received no response to a Nov. 10 letter. Moab also disclosed that it now owns 1,135,957 shares (7.9%).

In the Nov. 10 letter, Moab had made six requests of the board, including the names of two financial advisors retained by Mac-Gray to evaluate the $17.50-per-share cash proposal it received from KP Capital, information on meetings with KP Capital to discuss the offer, and an updated business plan.

After it received no response to these requests, it sent the Dec. 5 letter saying it found the reaction unacceptable and outlining plans to nominate a slate of directors for election at the 2012 annual meeting of shareholders.

Moab reported that it had bought 63,439 shares from Oct. 3 through Dec. 2 at prices ranging from $12.08 to $14.10. Moab also disclosed selling 1,399 shares on Oct. 24 at $14.45 each.

Discovery Equity Partners disclosed that it now owns 3,168,057 shares (5.8%). Discovery offered no plans or proposals other than to say it intends to review and evaluate its investment on an ongoing basis and may hold discussions with management as a part of that review. Discovery reported that it had bought 2,821,885 shares from Oct. 3 through Dec. 1 at prices that ranged from $4.74 to $8.49.

Behind the Scenes: Corvex, a hedge fund founded in 2011 by Keith Meister, Carl Icahn's former lieutenant, uses activism as a tool, but not a primary strategy. It would prefer to amicably be invited on boards; a proxy fight would be a last resort.

Corvex believes that AboveNet, the only pure-play data-fiber company in the telecom-services sector, is one of the most attractive ways to invest in the explosive growth in bandwidth needs. Corvex has strong relationships with other shareholders, board members and senior management. Accordingly, this is unlikely to be a confrontational engagement.

Corvex feels that there are many different avenues for value creation at AboveNet, including accretive acquisitions and buying back stock. However, based on the industry's recent consolidation and the acquisition prices, Corvex believes that buybacks might be the better strategy. Ultimately, Corvex believes the company will be sold to a strategic or financial buyer.

Earlier this year, it retained JPMorgan to run a small sales effort that included only financial buyers. That process ended with the company's receiving bids slightly below Corvex's $80-plus price target, plus preliminary interest from potential strategic acquirers.

-- Kenneth Squire

This item is by 13D Monitor, a research firm specializing in shareholder activism and 13D filings. For a full report, go to www.13DMonitor.com or call Kenneth Squire at 1-212-223-2282.